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Sunday, December 8, 2013

Aircel may launch 4G services in India next year

Aircel could become the second company to launch 4G services in India when it launches them in its established cities over the next 3-6 months, said a senior company executive.

The Chennai-based company will thus be competing with Reliance Industries-owned Reliance Jio Infocomm to be the second to launch such services after Bharti Airtel, India's largest mobile phone operator. Airtel's services though haven't been a success, hurt mainly by quality issues. Aircel's established service areas are primarily in South India. The company plans to offer LTE services in markets such as Chennai, where it has around 20% share, Anupam Vasudev, chief marketing officer, told ET.

He added that banks are willing to front the money required for capital expenses on the 4G rollout. With its promoters embroiled for the past three years in a CBI case of corruption and operations that were loss making, banks were reluctant to lend the company more money. However, Vasudev said Aircel has turned a new leaf with increased focus on profitability. "The focus is very clear that you need profitable growth. That has been our endeavor for the last one year. And we will have to continue doing this for another year before making any major investment."

The company has made a break even on operations half on account of higher revenue and half from lower cost, he said. "Cost has come down through network cost saving, negotiation with service vendors, controlling roaming costs," Vasudev said. Aircel had reduced its footprint in five service areas earlier where it was incurring losses due to vacant networks. It instead signed intra-circle roaming deals to lease out networks of RCom and Tata Teleservices where it did not have reach.

"We don't have scale. For use, it makes sense to kind of work with each other (competitors) because it helps utilize assets optimally. So we work with both Reliance and Tata DoCoMo." As such, from the days of being the company that advertised applications before most users had tried, or even heard of such a concept, the company is now more realistic about its customer base.

"In certain markets, the Apple ( iPhone) customer is not our customer." Vasudev said. Aircel thus developed a strategy to communicate the 'Aircel gives more' theme in all its offerings. In cities like Mumbai for example, Aircel can play truant on pricing. Unlike competitors, the Aircel network still remains idle, so it offers 12 hours of free calling between Aircel numbers from 5 am to 5 pm.

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